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Tokyo Keizai: Anime Industry Insiders Share Reservations About Netflix Streaming Model

posted on by Kim Morrissy
'If the anime is a hit, it's a win for Netflix. But if it's a loss, it's our win.'

The Tokyo Keizai's online newspaper published an article on Friday profiling the streaming company Netflix's investment into Japanese anime. The newspaper interviewed a number of anime industry insiders who have worked with Netflix on marketing or creating original anime programming for the platform. Notably, the article highlights some of the reservations that the interviewees have about working with Netflix.

The management at one anime production company that provides anime to Netflix commented: "If the anime is a hit, it's a win for Netflix. But if it's a loss, it's our (the production company's) win." The reason for this is because under Netflix's licensing deals, the streaming rights are bought outright, so that the production company does not receive royalties no matter how many views the anime gets.

Another issue, according to the management of an advertising firm, is that Netflix does not reveal viewership numbers at all to their partners. This makes it difficult to negotiate for a higher payment for the next streaming deal. A leader at one of the companies that participated in a well-known anime program is quoted as saying: "At this rate, we might become a subcontracting company to Netflix."

Netflix also deals primarily with streaming deals, meaning that there are many cases where the production company has difficulty selling off the rights to merchandise, games, home video, and other forms of media. This is a problem for an industry that relies heavily on media mix franchises as supplementary forms of revenue. The management at one production company complained that "because the number of people who see the anime through streaming is limited, it failed to become a hit." An insider at a different company remarked: "It would have been difficult for Demon Slayer: Kimetsu no Yaiba to become the huge hit that it was if it was only distributed through streaming."

Nevertheless, insiders have pointed out positive aspects of Netflix's involvement in anime, such as connecting anime creators with global artists and talents, and the high rates involved in streaming deals. According to one advertisement firm insider, "a major title that one knows can pay out up to 50 to 70 million yen per episode."

On the other hand, there are fears that it may be a mistake to rely on Netflix when there's no guarantee that the streaming company will invest in anime forever. "The quality of productions overseas, such as in China and Korea, is getting higher. If they can achieve the same quality, then they'll be able to get Netflix deals too," said one person who is familiar with the anime industry.

For now, however, it seems that Netflix's relationship anime is strengthening. In February, the company announced that it is forming partnerships with the manga creator group CLAMP; manga creators Shin Kibayashi, Yasuo Ohtagaki and Mari Yamazaki; novelist and film director Otsuichi, and novelist Tow Ubukata to develop and produce original Japanese anime projects to stream in 190 countries and territories worldwide.

Source: Tokyo Keizai

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